Second in a six-part series.

Drive down a street in Maine until you see 20 houses. Odds are, the owner of one of them is in trouble.

The Mortgage Bankers Association says 4.7 percent of home loans in Maine are classified as "seriously delinquent," meaning the house is in foreclosure or the loan payments are more than 90 days past due.

About 480 homes are expected to be in foreclosure in Kennebec County alone this year, for example, up from 186 in 2005, according to the association.

"I've been doing this work since 1985, and we have never had this many clients," said Frank D'Alessandro, the southern regional directing attorney for Pine Tree Legal Assistance, which provides free legal help to low-income Maine residents.

"Our foreclosure intakes have skyrocketed. We're doing double what we did last year, and last year was triple or four times what we did before."

Oftentimes, people are unaware what their options are, how to proceed and the dangers of being scammed when they are facing financial difficulties. When this lack of knowledge is combined with the downturn in the economy, the result is that foreclosures in Maine increased by nearly 250 percent from 2004 to 2008. The Center for Responsible Lending projects 6,208 foreclosures in Maine in 2009.

What can you do to prevent this from happening to you?

Educate yourself about the process. The Pine Tree group has a "Foreclosure Prevention Toolkit" online at www.ptla.org/cliented/housing/foreclosure/index.html. The site answers questions such as, "How do I know who to call?" and "Will declaring bankruptcy help me?"

And keep in mind that there is probably help available. Marcel Blais, chief executive officer at Northeast Bank, said it's important for homeowners with financial difficulties to contact the bank as early in the process as possible.

"We're actually fielding calls all the time," Blais said. "When you start feeling that there's an issue with the timing of your payment, you need to contact the bank."

State Rep. Sharon Treat, a Hallowell Democrat, says most homeowners know little about the process and that's not surprising.

"We don't have a very efficient system right now of letting people know what their options are and what kind of help is available," Treat said.

Treat is sponsoring a bill (L.D. 1418) that would address several foreclosure concerns. A hearing for the bill was held last week, and Treat said a work session is scheduled for Monday. Part of the bill calls for a hot line for homeowners with financial difficulties to get information and answers to their questions.

Blais said foreclosure proceedings typically begin when loan payments are late by 90 days. But if the homeowners call early enough, the bank might offer to allow deferred payments, reduce the interest rate for a period of time or extend the length of the mortgage.

"The whole idea is to try to keep them in their home," Blais said. "I don't want to own houses. We're not in the business of taking on houses."

A recent article in The New York Times said a computer registry called Mortgage Electronic Registration Systems holds mortgages on 60 million homes in the United States.

Treat said another problem is when homeowners want to negotiate with the banks, but get stonewalled during the process.

Testifying at Tuesday's hearing, Anne Healy of Belgrade said when she tried to contact someone to get the proper paperwork for a change in her loan, "We called and called but could not reach the representative who was working on our case ... She had apparently dropped off the face of the Earth -- and no one else could give us the OK."

"You literally have no idea who you could negotiate with or if there's an opportunity to negotiate," Treat said.

Treat's bill would establish a process for all homeowners facing foreclosure to have the opportunity to go through an independent mediator to work out an agreement with the mortgage holder. Treat said that in other states in which a mediator was used, an agreement was reached about 70 percent of the time.

The bill would also require that lawyers representing corporations claiming to hold a mortgage produce proof of ownership in court. Treat said she has seen cases in which houses were foreclosed upon without the proof of holding the mortgage.

This mediation process is also important, Treat said, for homeowners who can't afford a lawyer. While organizations like Pine Tree Legal Assistance and the Maine Volunteer Lawyers Project will provide free representation for low-income Mainers, others making a little more are often still too strapped to pay.

"The vast majority of these cases have no attorneys, and the tendency is to just give up on it," Treat said.

Allan Rancourt, president of Kennebec Federal Savings Bank in Waterville, said he was concerned that mediation would add to an already-lengthy foreclosure process. Rancourt said the Federal Home Loan Mortgage Corporation (more popularly known as Freddie Mac) reports that the foreclosure process in Maine is longer than every other state but Vermont.

"According to Freddie Mac, the process in Maine takes nine to 12 months," Rancourt said. "To make it an even longer process, I'm not sure that would go."

Rancourt also questioned how often an independent mediator would actually be useful.

"For us, when we get a foreclosure, it's usually because of a divorce," Rancourt said. "So I don't think the borrowers would go for another mediator."

Matt DiFilippo -- 861-9243

mdifilippo@centralmaine.com